513 F.2d 1142 (9th Cir. 1975), 71-2919, Washington Utilities and Transp. Com'n v. F.C.C.

Docket Nº:71-2919, 72-1198.
Citation:513 F.2d 1142
Party Name:WASHINGTON UTILITIES & TRANSPORTATION COMMISSION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Data Transmission Co. et al., Intervenors. NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents.
Case Date:January 20, 1975
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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513 F.2d 1142 (9th Cir. 1975)




America, Respondents,

Data Transmission Co. et al., Intervenors.




America, Respondents.

Nos. 71-2919, 72-1198.

United States Court of Appeals, Ninth Circuit

January 20, 1975

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[Copyrighted Material Omitted]

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James R. Cunningham, Asst. Atty. Gen., Olympia, Wash., for Washington Utilities and Transp. Comm'n (argued), for petitioners.

Charles M. Firestone, Counsel, F.C.C. (argued), Washington, D. C., Joel Davidow, Atty. Dept. of Justice (argued), for respondents.

Michael L. Glaser (argued), of Glaser & Fletcher, Washington, D. C., for Data Transmission.

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William H. Borghesani, Jr. (argued), for Nat. Retail Merchants Assn., Washington, D. C., for applicants in intervention.

Thormund A. Miller, Gen. Counsel, Southern Pacific Communications, San Francisco, Cal. (argued), for Southern Pacific Communications Co.

Michael H. Bader (argued), of Haley, Bader & Potts, Washington, D. C., for Interdata Communications.

Before BROWNING, WRIGHT and WALLACE, Circuit Judges.


BROWNING, Circuit Judge:

The Federal Communications Commission authorized Microwave Communications, Inc., to construct a specialized communications common carrier route between St. Louis and Chicago. Microwave Communications, Inc., 18 F.C.C.2d 953 (1969). As a result, a large number of applications were filed by others interested in providing specialized communications services in competition with the established carriers. 1 The applications raised common questions. The Commission instituted a proceeding to formulate policy and establish rules with respect to these issues. See Notice of Inquiry to Formulate Policy, Notice of Proposed Rulemaking, and Order, 24 F.C.C.2d 318 (1970). These petitions seek review of the final order issued as a result of that proceeding. First Report and Order, 29 F.C.C.2d 870 (1971). 2

The Commission's order reflects two basic determinations. The Commission decided that "a general policy in favor of the entry of new carriers in the specialized communications field would serve the public interest, convenience, and necessity." 29 F.C.C.2d at 920. It also decided that "it is not necessary or desirable in the public interest to hold comparative hearings for the purpose of restricting new entry in any particular area to only one private line applicant." 29 F.C.C.2d at 926.

Petitioners attack both determinations on substantive and procedural grounds resting upon the Federal Communications Act, 47 U.S.C. §§ 214, 309. They also argue that the Commission failed to consider the environmental impact of the policy adopted by the order as required by the National Environmental Policy Act, 42 U.S.C. § 4321 et seq.

Respondents respond on the merits, and, in addition, challenge petitioners' standing to seek review of the Commission's order.

We hold that petitioners have standing. We affirm the order.


We have been admonished that "(g)eneralizations about standing to sue are largely worthless as such" (Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 151, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970) ), and that the solution to standing "problems is in any event more or less determined by the specific circumstances of individual situations." United States ex rel. Chapman v. Federal Power Commission, 345 U.S. 153, 156, 73 S.Ct. 609, 612, 97 L.Ed. 918 (1953). From an examination of the nature of this proceeding, the character and interest of the parties, and the substance of the issues, we conclude that each petitioner is a "proper party to request an adjudication of (the) particular issue(s) " it seeks to raise. Flast v. Cohen, 392 U.S. 83, 100, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968). See also United States v. Richardson, 418 U.S. 166, 174, 94 S.Ct. 2940, 2945, 41 L.Ed.2d 678 (1974); Sierra Club v. Morton, 405 U.S. 727, 732, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972).

Petitioners seek review of final administrative action. The availability of judicial review of administrative decisions is generally thought to serve important

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public purposes. 3 This premise underlies the rule that "only upon a showing of 'clear and convincing evidence' of a contrary legislative intent should the courts restrict access to judicial review" (Abbott Laboratories v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 1511, 18 L.Ed.2d 681 (1967)), and has led to a progressive expansion of the categories of persons who are granted standing to obtain such review. See, e. g., Arnold Tours, Inc. v. Camp, 400 U.S. 45, 91 S.Ct. 158, 27 L.Ed.2d 179 (1970); Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970); Association of Data Processing Service Organizations, Inc. v. Camp, supra.

Congress has expressly authorized review of final orders of the FCC. 4 Thus, "Congress has weighed the need for and value of judicial review of a given category of administrative decisions, and has decided it is warranted. Congress having explicitly made that decision, the Court has before it only the implementing, secondary decision as to whether there is reason not to allow the particular plaintiff in question to be one of those who may invoke the review and the standing rules tend to become more liberal." Scott, Standing in the Supreme Court A Functional Analysis, 86 Harv.L.Rev. 645, 656 (1973).


The Washington Utilities and Transportation Commission (WUTC) is an agency of the State of Washington, charged by law with responsibilities related to issues it seeks to raise. There is substantial authority that such an agency, raising such issues, is a proper plaintiff to obtain review of an administrative order.

WUTC's petition for review alleges that WUTC and the general public of Washington "are aggrieved" by the FCC order because "(e)ffectuation of the Order would serve to increase the burden to intrastate telephone users by reason of the diversion of interstate usage of telephone network facilities to the detriment of telephone users whose rates are regulated by state authorities."

The factual and legal premises for WUTC's assertion of standing are largely conceded. The telephone system is a single, integrated network. The same services and equipment provide both interstate and intrastate services. The rates fixed for these services must be sufficient to allow the utility to recover its expenses and receive a reasonable return on its investment. Since the rates of interstate services are fixed by the federal agency and rates for intrastate services by state agencies, common plant and service costs must be allocated between them. Smith v. Illinois Bell Telephone Co., 282 U.S. 133, 146-149, 51 S.Ct. 65, 75 L.Ed. 255 (1930); The Minnesota Rate Cases, 230 U.S. 352, 435, 33 S.Ct. 729, 57 L.Ed. 1511 (1913). The allocation reflects the relative use of the common facilities in providing one service or the other. A reduction in interstate service relative to intrastate service would decrease the allocation of the costs of common plant and services to the base for interstate rates, and increase the allocation of these costs to the base for intrastate rates, thus requiring

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state regulatory agencies to increase rates for intrastate service. 5

WUTC contends that by authorizing new carriers to furnish specialized interstate communication services without determining that present carriers are unable to meet the need for this service, and without individualized determination of economic exclusivity, the Commission's order will result in an increase in the number of carriers competing to provide this interstate service and will decrease the usage existing carriers will make of common telephone facilities for the purpose of providing interstate service. This in turn will require allocation to intrastate service of a larger share of the costs of service and equipment used in providing both intrastate and interstate services, and will compel WUTC to raise rates for intrastate service, contrary to the interests of Washington telephone users.

WUTC is invested by statute with broad responsibilities to protect the interests of the people of the State of Washington in matters related to the cost and quality of telephone service. WUTC is required to "(r)egulate in the public interest . . . the rates, services, facilities, and practices of all persons (including telephone companies) engaging within this state in the business of supplying any utility service . . . to the public for compensation . . .." R.C.W. 80.01.040(3). The interest of the public to be protected under the statute is that of the customers of the regulated utility. Cole v. Washington Utilities & Transportation Commission, 79 Wash.2d 302, 306, 485 P.2d 71, 73-74 (1971). WUTC is empowered to fix rates for intrastate telephone service that are "just and reasonable" in order to protect consumers from charges that are "unjust, unreasonable, unjustly discriminatory or unduly preferential," as well as to protect the utilities from charges that are "insufficient to yield reasonable compensation for the service rendered." R.C.W. 80.36.140.

The Supreme Court of Washington has specifically recognized that WUTC has an obligation to protect the interests of telephone users in separations matters analogous to those underlying WUTC's petition for review in this case that come within its intrastate regulatory jurisdiction. In State ex rel. Pacific Northwest Bell Telephone Co. v. Washington Utilities & Transportation Commission, 66 Wash.2d 411, 403 P.2d 73 (1965), WUTC, under authority granted by R.C.W. 80.36.160, issued an order relating to the division of revenues derived from the interchange...

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